ECB defends securities settlement system after fee hike

LONDON (Reuters) - Financial markets need to push more trades through the European Central Bank’s settlement system to cut costs, an ECB official said, dismissing industry criticism that the new system was failing to deliver promised benefits.

European Central Bank (ECB) headquarters building is seen in Frankfurt, Germany, March 7, 2018. REUTERS/Ralph Orlowski

The ECB built a pan-European TARGET 2 Securities, or T2S, platform for settling securities trades, to help create a cheaper European Union capital market to compete better with the United States — and with Britain after it leaves the EU.

Opened in June 2015, T2S has been in full operation for about 18 months but had to raise fees earlier this year.

Volumes remain too low to allow the ECB, which is still recouping its investment cost, to cut fees. Some national settlement systems that T2S was meant to replace still remain.